Report: UK falls behind as smart meters rolled out across Europe

'Deregulated' Blighty could struggle to fit smart meters by 2015

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The number of smart meters installed in European homes is likely to "accelerate swiftly" over the next three years, according to research published by a provider of the technology.

The report (1-page / 213KB PDF), which was commissioned by Cambridge-based supplier Sentec, predicted that although few regions in Europe were yet to fully embrace the technology Western and Northern Europe would likely see 70% deployment by 2015.

However Mark England, the company's chief executive, said that uncertainty remained over whether the UK would reach the 65 per cent deployment predicted in the report.

"The deregulated structure of the UK market is uniquely challenging for rapid and co-ordinated action in a large scale initiative like this and we believe that smart meter deployment in 65 per cent of UK homes by 2015 is not possible. There is a great deal of work still to do to finalise the technical and regulatory framework for smart metering," he said.

Smart metering technology is due to be installed across the UK from 2014, with every UK household expected to have the technology by 2019. This is more ambitious than the European programme, which requires that 80 per cent of domestic electricity customers have smart meters by 2019. The Department of Energy and Climate Change (DECC) has estimated that the programme, which will involve replacing around 53 million existing gas and electricity meters, will cost approximately £11.7bn.

Smart metering enables a two-way flow of information that can deliver real-time information about energy consumption and demand for energy to suppliers and network operators. The government has said smart metering will help to slash unnecessary energy use, reduce emissions and cut consumers' energy bills.

Energy law expert Chris Martin of Pinsent Masons, the law firm behind Out-Law.com, said that England's sentiments were "fair comment".

"The targets set by the UK government for the mandated roll-out of meters are certainly ambitious. There is still much to be done to finalise the technological and regulatory framework for the roll-out and such an uncertain environment has understandably deterred energy suppliers from making the significant capital investments needed to accelerate the programme," he said.

Martin said that, for example, the government has yet to finalise the regulatory and commercial framework for the Data and Communications Company (DCC), which will provide communication services to and from smart meters. Last month the DECC issued the first of five consultations which will enable the DCC to be regulated.

The Sentec figures show a current high take-up of the technology in Italy, where meters are already installed in over 94 per cent of homes, due to a large early investment in the technology by the Italian government-controlled energy company Enel. In the Nordic states participation already stands at almost 70 per cent, in large part due to recent government energy policy in Sweden.

"The decision by Enel to design and build their smart meters has meant that they have an exact match to their operational requirements at a favourable cost point and it may benefit other utilities to follow their example," said England. "To make the most of that approach, it's crucial that energy companies across Europe are thinking not only about what smart meters need to deliver now, but what they might need to deliver in the future."

In addition to the UK predictions the figures predict a 49 per cent take-up in France by 2015 and a predicted take-up of 73 per cent in Spain and Portugal. However Germany and Poland showed no signs of embracing the technology, with predicted take-up for the two countries sitting at less than Sentec's 'low' range of below 30 per cent by 2015.

In a separate study, market research company IMS Research, which provided the data, said that over £2.4bn would be spent in the UK on smart home energy management devices over the next five years. That figure includes both the smart meters themselves and other devices, such as the in-home devices that can 'talk' to the meters, it said.